All eyes on Fed decision as US tech shrugs off recession fears

by | Jul 27, 2022 | World

The Federal Reserve, the US central bank, is expected to raise interest rates by 75 basis points, but have markets already priced it in?US tech stocks popped on Wednesday, lifted by upbeat quarterly earnings from Microsoft and Google-parent Alphabet ahead of the Federal Reserve’s decision to announce another increase in borrowing costs.
Fed Chairman Jerome Powell, who economists predict will raise interest rates by 75 basis points, has made it clear that the US central bank is ready to do whatever it takes to fight inflation. He is also expected to signal what the future path of interest rate hikes will look like.
US inflation jumped 9.1 percent in June, the largest gain since 1981.
Fed policymakers have a tight rope to walk as they struggle to strike a balance between cooling consumer prices and not slowing economic growth. Fears over a recession are growing among some economists and analysts.
“The Fed’s on pace to hike by 75 basis points today, which will continue to increase the cost of capital for an already slowing economy,” Peter Essele, head of portfolio management at Commonwealth Financial Network, a Massachusetts-based firm, told Al Jazeera.
Megacap growth stocks have been hammered this year. The S&P 500, a vital indicator of Wall Street’s confidence, entered a bear market in 2022, having suffered its worst first six months since 1970. Cryptocurrencies have plummeted, with the world’s largest digital coin, Bitcoin, losing more than 55 percent this year.
The pandemic-era housing boom is cooling fast. US pending home sales fell in June by the most since Ap …

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